WHAT IS AN APPRAISAL? An appraisal is an objective supported opinion of the value of a piece of property made by a person who has sufficient knowledge, training and experience to accurately estimate its value. Appraisers use comparable sales obtained from local MLS data bases and private sales, together with information about the neighborhood and community as well as local and national economic factors, to support the appraised value.
WHY DO I NEED AN APPRAISAL? The most common reason you need an appraisal is to obtain a mortgage when buying a home. Other reasons include mortgage refinancing, estate settlement, divorce proceedings, establishing a home’s selling price, home equity loans, corporate relocations, and new construction.
WHAT IS THE ROLE OF A RESIDENTIAL APPRAISER? The fundamental role of a residential appraiser is to provide a professional opinion, usually an estimate of market value, to be used in making real estate decisions. Appraisers are typically contracted by banks, mortgage companies, attorneys, title companies, and other lenders to estimate the value of real estate involved in a loan transaction. Appraisers also provide value opinions in litigation cases, estate matters, corporate relocations, investment decisions, and consult home owners regarding the list price or the contributing value of planned improvements.
WHAT ARE THE STEPS INVOLVED IN THE APPRAISAL PROCESS? First the appraiser will inspect the subject property. This requires a physical inspection, both interior (in most cases) and exterior. The appraiser will measure, take photos and note the property’s features, quality of construction, materials, and overall condition. The next step is to research recent market activity of similar properties in the market area. The final step involves the written report. An analysis is made of the property being appraised utilizing a minimum of three similar sales. At this point, adjustments will be made as to each property’s difference and a final value will be determined. The written format includes all supporting documents such as floor plans, maps and detailed information about the property.